About Us Retirement research and thought leadership Beyond savings: 3 insights transforming retirement income

Retirement research and insights

Beyond savings: 3 insights transforming retirement income

Taking retirement plans from saving to spending.

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The case for change: 3 critical insights

A recent Principal® survey shows employer-sponsored retirement plans are approaching a pivotal point. Three key findings suggest plans likely need a design change. One that includes possible solutions for in-plan retirement income to help meet the changing needs of today’s workforce.
Insight 1: Responsibility Insight 2: Asset retention Insight 3: Plan design gaps

Insight 1:

Employers’ sense of responsibility aligns with employees’ retirement income needs

Employers recognize they may need to help employees not just save for retirement but also convert those savings into income that may last through retirement.

Meanwhile, employees approaching retirement express anxiety about their savings and lack clear plans for managing their retirement income, indicating a strong need for additional guidance and support.

Employers feel responsible to:

93% Help employees prepare for the transition to retirement.

83% Help employees create retirement income from their savings.

Employees feel they need help:

66% Making sure retirement savings last their lifetime.

64% Developing a specific plan for assessing and using savings after retirement.

Insight 2

Insight 2:

In-plan asset retention signals shifting retirement patterns

Should retirement plans look to keep retiree assets?

As plans evolve to include possible solutions for in-plan retirement income, it’s likely that all or a portion of employees’ assets will remain in the plan.

Employers’ views on retaining retired participants’ assets in the plan:

35% actively encourage participants to stay in the plan.

22% prefer to retain assets in the plan but do not actively encourage participants to stay in the plan.

35% are neutral about whether participants stay in the plan after they retire.

8% prefer to have retirees move assets out of the plan.

57% of employers want to retain retiree assets.

Why employers want to retain retiree assets:

60%

To provide retirees with vetted and monitored investments.

59%

To provide retirees with access to trusted education, financial services, and advice.

48%

To maintain low investment and administrative fees.

Insight 1 Insight 3

Insight 3:

Traditional plan designs miss important income components

Today, the primary focus of most retirement plans continues to be saving. While important, shifting demographic and economic trends appear to be redefining what employees need from their retirement plans.

What demographic shifts are happening in the workforce?

  • By 2030, all baby boomers will be age 65 plus.
  • Gen X joins the retirement ranks as they begin turning 65 in 2030.
  • Retirement reality shifts as most new retirees will rely on their defined contribution savings and discover they may not have saved enough.
  • Long lives can mean longer retirements, meaning individuals may need reliable income strategies spanning 20-30 plus years.

Why is retirement income becoming a priority for many employers?

Employers are recognizing that many workers are not fully prepared for the financial realities of retirement.

Employers are concerned that:

72% Employees are not saving enough to live comfortably in retirement.

63% Employees are not prepared to create an income stream in retirement.

Insight 2 Back to Insight 1
Strategically designing solutions for retirement income

The retirement income conversation isn’t new. Historically, it has centered on basic education and raising awareness about the importance of planning for income in retirement.

What types of retirement income solutions are available and being offered by employers today?

Today, the conversation is evolving. Employers are now beginning to recognize the need to offer strategies for retirement income.

Education and advice services

  • Financial planning and advice
  • Tools and calculators
  • Education and retirement income planning

In-plan options

  • TDFs with lifetime income
  • Managed account services (access offered to participants)
  • Hybrid qualified default investment alternatives (QDIA)
  • Managed payout funds
How can employers get started with retirement income options?

There’s a path forward no matter where an employer is in the journey, whether just exploring the idea, ready to implement an in-plan retirement income option, or somewhere in-between.

The first step is the same, assess the current plan design—review employee demographics, investment lineups, distribution options, and available education resources and advice tools.

While understanding where a plan is today is the first step, it’s just one of four phases in the implementation journey. Ready for what comes next?

Download the full research paper (PDF) for your complete implementation roadmap.
Retirement income FAQ
What does retirement income mean when referring to an employer’s retirement plan?

Retirement income typically refers to the possible solutions available to help employees turn their savings into reliable income in retirement. These solutions can include both guaranteed lifetime income options (such as annuities) and non-guaranteed income strategies (like a managed payout fund). The plan may also offer access to planning and advice services, along with in-plan investment options to help employees smoothly transition from savings to spending in retirement.
What’s the benefit for an employer to offer a possible retirement income solution?

Offering possible retirement income solutions can help employees feel more confident about retiring on time by turning savings into steady income. For employers, it can help support workforce planning, improve employee satisfaction, and strengthen the value of the overall benefits package. Additionally, these solutions can help retain assets within the plan if that aligns with the employer’s goals, potentially leading to better plan economics and continued engagement with retirees.
How can retirement income options integrate with existing plan features (like auto-enrollment, QDIAs, or investment menus)?

Many retirement income options are designed to fit seamlessly alongside or within the plan’s existing structure. They can be included as part of the investment menu or built into default options like QDIAs. These options can work in tandem with features like auto-enrollment and auto-increase, helping employees not only get started in the plan but also potentially save enough to generate the retirement income they need to live the lifestyle they want in retirement.
How do employers communicate retirement income options to employees?

With more than half of employees worried about making their retirement savings last a lifetime , clear communication about retirement income options is crucial. Employers can help employees understand how these options address their core retirement concerns: having enough income, making savings last, and creating a reliable spending plan. Employers can introduce the options through familiar channels—emails, webinars, one-on-one meetings, and plan documents. This education-first approach helps employees feel more confident about using retirement income options to support their long-term financial security.

Ready to put these insights to work?

Contact your Principal® representative to learn more about our comprehensive approach to retirement income and implementation.
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Footnotes

Principal ® Retirement Survey—Plan Sponsor Insights, December 2024. All statistics are from the survey unless otherwise noted. Principal Financial Well-Being Index SM 2024 Wave 3, January 2025. United States Census Bureau, By 2030, All Baby Boomers Will Be Age 65 or Older, December 2019. United States Census Bureau, Birth Cohorts Geographic Mobility Report, May 2025. Social Security 2022 Actuarial Life Table, as used in the 2025 Trustees Report.

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